CPGMATTERS - Best-Selling Brands of 2013 Delivered Health Benefits, Convenience

Some 190,000 new UPCs and 9,500 new CPG brand launches were placed on store shelves in 2013 to tempt picky consumers to toss them into their shopping carts. So which ones were the most successful? 

According to research by Information Resources, Inc., most of the winning products offered health benefits and convenience in both food and non-food categories. The top products ranged from Greek yogurts and energy drinks to conveniently-packaged laundry detergent and coffee.  

IRI’s 2013 New Product Pacesetters report is an industry-recognized benchmark analysis of exceptional first-year CPG sales success for newly launched products.    

“Manufacturers are always striving to create breakthrough innovation. Our impressive list of the 2013 Pacesetters, which earned an average of $35 million in their first year, is no exception, as these products fuel accelerated growth and serve as catalysts for excitement in the CPG arena,” said Larry Levin, executive vice president and practice leader, IRI. 

Susan Viamari, editor, Thought Leadership, IRI, said, “Innovation in 2013 is all about healthier-for-you products. ‘Healthy’ is truly everywhere. From food and beverages to hair care, skin care, and even pet food and cleaning products, consumers not only want to look and feel their best, but they want improved wellness to extend to their homes and pets, too.”

A whopping seven of the top 10, and 73 of the top100 food and beverage products launched in 2013 offered a healthier-for-you benefit. 

Consumers are still seeking a healthy, convenient way to become or stay light and fit, so three yogurt lines made the “top10” ranking this year, with Dannon Light & Fit Greek capturing the top spot. Overall, the most prevalent “add” in 2013’s Pacesetters brands was fiber and/or whole grains, which was/were found in 42% of the new launches. In addition, the report underscores that “dieting” has evolved into “nutritional management.” Consumers are looking for products that remove or limit less desirable attributes, so products offering lower calories, less sugar and fewer ingredients are hitting just the right note. 

Here are the top ten: Dannon Light & Fit Greek, Yoplait Greek 100, Kellogg’s Special K Pastry Crisps, TOTTITOS Cantina Tortilla Chips, Bud Light Lime Lime-a-Rita, Müller Yogurt, Eight O’Clock K-Cups, Pepsi NEXT, Kellogg’s Special K Flatbread Breakfast Sandwiches and Atkins Frozen Meals.   

In the non-food arena, average year-one dollar sales for the top100 brands were $34 million. The best-selling launches of 2013 demonstrated the power of promising healthier, worry-free expectations and experiences, as well as of providing economical options.

Earning $2 billion in aggregate year-one launch sales, 48 out of the top100, non-food Pacesetters deliver wellness. And, for the first time in recent Pacesetter history, three home-care products achieved top-10 status, including Tide Pods, Ajax Triple Action and Downy Infusions. Hair-care marketers are also “going big” with results, experiences and value, with L’Oreal’s Advanced Haircare and Vidal Sassoon Pro Series securing top spots. 

Here are the top ten: Tide Pods, L’Oréal Advanced Haircare, ZzzQuil, Vidal Sassoon Pro Series, Clear Scalp & Hair Therapy, Downy Infusions, Ajax Triple Action, Always/Tampax Radiant, Secret Outlast and Puffs Basic. 

In the convenience-store arena, average year-one sales across the top10 IRI New Product Pacesetters were an astounding $94 million.

“The power of consumers’ pursuit of health and wellness is even seen in the convenience channel, with neuro Drinks landing a top-10 ranking,” said Levin. “However, ‘grab and go’ indulgence is still top-of-mind for consumers, so beer, liquor, tobacco and energy drinks still dominate this channel’s best-selling launches.” 

Here are the top 10: Monster Energy Ultra, Red Bull Total Zero, Marlboro NXT, NJOY, Bud Light Lime Lime-A-Rita, Budweiser Black Crown, neuro Drinks, Pepsi NEXT, DORITOS JACKED, and Starbucks Refreshers.  

“Consumers are looking across CPG aisles for opportunities to make their homes, menus, bodies and minds healthier,” concluded Viamari. “CPG innovators have a significant opportunity to help consumers live well for less. Brands that provide powerful results and exciting experiences are sure to capture attention and excitement, accelerating share of spending into 2014 and beyond.” 

Article written by Rose Anthony for CPGMatters.com - Original post can be found here: http://www.cpgmatters.com/Products-Solutions0314.html

CPG MATTERS: What Trends Will Affect Trade Marketing in 2014?

The past year has pushed manufacturers and retailers to work at a much higher level of technology sophistication in trade promotion management. Executives familiar with TPM  say trends that contributed to this development will continue in 2014, but with more intensity

“Sophisticated strategies are required for this road ahead. To spend trade dollars more effectively, they are going to have to embrace this technology for the coming year,” says Joel Cartwright, trade promotion management solution engineer for AFS Technologies. 

Based on feedback from customers, the company recently staged a webinar that presented 10 predictions for 2014. They are: 

1. Economic growth will continue to be slow and steady.

There is no post-recession bump. Based on plans AFS is discussing with its clients, they don’t see a downturn, but neither do they see a big increase. There is heavy competition for shopper dollars, and TPM spend is being closely scrutinized. In contrast, supply chain is already heavily optimized, but trade spend is more of a gray area. It’s looked upon as an opportunity for more streamlining.

2. Manufacturers will continue to bear the burden of increasing costs.

Retailers are seeking specific cost certainties, which means they have to push overall margins back to manufacturers to increase competitive dollars for the shopper basket. Consumers have created purchasing options to help save money, so retailers need to further broaden that basket. As the cost of goods increases, trade dollars are going to have to offset this to maintain margins. The biggest enemy here for most CPG companies is private label: how to compete at pricing from a private label standpoint; that is, how to stretch trade dollars while not necessarily going toe-to-toe with pricing, but promoting brands to make them more viable than a private label.

3. The evolution of the “smart shopper” will continue.

Shopper insights are critical here. Consumers desire a more personal shopping experience within the grocery store, and this will show up in a specific post-promotion analysis. Manufacturers want to get away from doing one-off post-promotion analyses regarding the smart shopper, and want to look at an overall plan to entice the shopper. It is not necessarily a matter of looking at single promotions for the back-to-school event or the Fourth of July event, but rather how they can encompass the smart shopper across an entire plan.

4. Manufacturers who master the “app world” will gain the competitive advantage.

Consumers seek out mobile apps to empower their shopping strategy. The personal experience the shopper has with the retailer through one-on-one marketing is becoming a reality, so point-of-sale type events and interactive apps are becoming critical to manufacturers. They are seeing this not only on the marketing side of the business, but on the trade and sales execution sides. 

5. Old school is not ready to give up its shelf space just yet.

Traditional grocery is still backed by big dollars. There is a lot of emphasis on technology, but major manufacturers are competing with natural foods and organics. They didn’t bury their heads in the sand in doing this, and they got creative. There will be more of that creativity seen in the coming years. There will be many more new item launches and line extensions. Meanwhile more non-traditional food manufacturers are coming into the TPM space. There are also more companies from the durable goods side coming into the TPM space, as well.

6. Trade promotion spend will be spread even thinner.

The annual operating plan is going to come to the sales organization as a call for increased top-line growth with minimal additional budget for the trade plan. For example, they may need to grow the top line 3% while keeping their trade budgets flat year over year. Meanwhile retailers want to expand their baskets and cover margin costs, and are pushing the cost back on manufacturers. Only 

24% of AFS’ clients will spend more on trade promotion in 2014 compared to 2013, so the majority will be doing more with the same or less dollars.

7. Manufacturers will focus heavily on getting the most out of their trade spend.

For the 76% not spending more on trade dollars, improving trade promotion effectiveness is the biggest business challenge. To accomplish this, accurate lift analysis is mandatory. When clients analyze their promotional activity, much of the guesswork comes in the lift analysis. They can’t make that connection between the consumption data lift and back to the shipment data lift. They are going to have to shift dollars based upon performance. Many manufacturers are going to a tiered trade strategy based on what customers can drive the biggest bang for the buck.

8. Manufacturers will master their data.

Big data is here and everybody has to get on board. There are tons of data out there, and managing the big data is the big concern. Most manufacturer s are getting bombarded by data from multiple sources, such as syndicated data, shipment data, retailer point-of-sale data. They are able to sort it out, but they are struggling with the interpretation of that data. As a result, they are hiring external experts to build data evaluation programs to help them understand what the data is saying. The money for this is coming out of their trade budget. 

9. Underperforming TPM tools will be jettisoned.

Some manufacturers are finding that their 8-10 year old TPM systems are not evolving with the company’s growth, and 44% of companies in this space are looking to change their TPM tool in the next 12 months. The old solution can’t provide the visibility that is needed into their trade plans. They need that to see how their business is growing and where to apply all this data. Also, as manufacturers push more work onto their broker network, they need to be able to give the brokers that same visibility. 

10. Manufacturers will empower field teams with technology.

Technology is power. Manufacturers will be empowering field teams with key technology, such as smartphones and tablets, because the retail execution is greatest trade promotion challenge. Field teams will be better informed and positioned to make an impact, and provide very quick turnaround on events. Those field teams will be able to make promo deals on the fly. For example, they may be asked: “Can you participate in my back-to-school event because another company dropped out?” They can be right there with the buyer, pull out their tablet, and say, “Yes, I can do it. I can see where I am at from a spending standpoint, and I can afford to do it.”

In summary, the big focus in the year ahead will be on technology. “We haven’t seen a huge change in growth, but we do see that trends are evolving and becoming more amplified,” Cartwright concludes.

For more information: www.afsi.com. Written by Dan Alaimo for CPG Matters Website. Original Article can be located here: http://www.cpgmatters.com/TradeMarketing0214.html

Analyzing Shopper Behavior Gives Mondelez a Competitive Edge

Mondelez International is still rationalizing its brand and product portfolio after its 2012 separation from Kraft Foods. Witness the fact that Mondelez just agreed to sell a controlling interest in its SnackWell’s cookie and cracker brand to a private-equity firm. Also, Mondelez and its remaining bell-cow brands such as Nabisco are continuing to figure out the best ways to remain a global dominator in a snack market that provides challenges even as it grows disproportionately compared with other CPG staples.

Improving in-store marketing and merchandising will be crucial to realizing that goal. So Mondelez has set out to observe and analyze shopper behavior with the aim of raising consideration and purchase of Nabisco snacks in the supermarket. Their initiative relies on video and other gathered data of how shoppers behave in participating supermarkets and then integrates it with transactional, quantitative data supplied by the retailers.

“Our goal is to give our shoppers every opportunity to purchase our products, but do so in a way that is meaningful and aligns to shopper behavior,” Ameeta Jain, U.S. director of shopper insights and category management for Mondelez, told the annual meeting of the Category Management Association recently.

To that end, noted Priya Baboo, president of client solutions for VideoMining Corp., her firm’s “objective quantification of behavior helped [Mondelez] prove and disprove some of their hypotheses and helped them refine their shopper-marketing strategies based on a clear understanding of how people shop snacking categories in the U.S.,” including helping Mondelez to develop an understanding of “how things are the same or different” between American shoppers and those across the rest of the world.

VideoMining’s technology creates a “network” of cameras throughout the store, producing a “door-to-door, feet-on-the floor” tracking of each shopper, Baboo said. The network also captures every single one of the “do I buy or don’t I buy” moments, measures those moments in seconds, and then relates them to sales and conversion. 

Optimizing the growth opportunities available in global snacking was, of course, the main part of the rationale for splitting Kraft and a mature U.S. grocery-brands business away from Mondelez and its higher-potential portfolio of worldwide brands that range from Oreo to Ritz to Cadbury candies. In the U.S. market, for example, the growth rate for snack sales is about 5% -- more than double that for foods and beverages overall. And the potential to influence more purchases in crackers and cookies is palpable: 58% of snack purchases are unplanned when a shopper enters the store, according to research presented by Jain, compared with just 38% of other food categories.

Mondelez and VideoMining applied what they called a “5S” architecture to shopper behavior, describing a sort of funnel in which consumers first see, then scan, spot, show interest and select their ultimate purchases. The objective is to make sure that Nabisco and other brands are optimizing their products, advertising and merchandising at each level, Jain explained.

Thus: Is the category in a visible and relevant location so that consumers can “see” it? Then, is the category segmented in a way that is logical and easy to shop so that it can be spied as shoppers “scan” the store? When it comes time to “spot” particular items or brands, are they organized in a way that shoppers can find the one they want? To get shoppers to “show interest,” does the category have the right assortment for all shoppers? And to be “selected,” do the items have the right price, promotion and messaging to drive conversion?

At the upper levels of the funnel, for example, Jain and Baboo explained how Mondelez is trying to optimize the snacks category within the store in part by gaining placement in the most productive spots in the center aisles and by locating in-store advertising and promotions strategically. Jain observed that “everyone enters the store via the lobby and exits through the checkout” so Mondelez must “lever the real estate accordingly.” That could include, for instance, using the lobby to drive awareness of sales and seasonal promotions as shoppers begin their trip and the checkout to drive impulse purchases.

VideoMining research helped Mondelez understand how the supermarket is trafficked and the implications of that for the optimal location for snack and cookie brands. The back of the store is more likely to be trafficked earlier in a typical shopping trip, the front of the store later, Jain explained. That influences Mondelez’s efforts to “lever the perimeter to showcase categories that are more likely to be purchased earlier in the shopping trip, or center-store items that are complementary to the perimeter purchases,” Jain explained.

Baboo elaborated. “When people are near the beginning of their trip, they’re more open to messages and looking at impulse categories” such as cookies and crackers. That means “snacking categories may want to have a presence in the perimeter, or at least messaging or signage, to capture the attention of shoppers early.” 

Mondelez and VideoMining found that more shoppers are exposed to snacks by displays than shelves, 53% to 47%, and that promotion of the category is most effective in the lobby or the rear of the store.

Thus, Baboo said, if Mondelez “can stop the shopper with a message for Oreos or Ritz on the perimeter as they’re going to the dairy section, for instance, you’re more likely to be able to get them to walk into the cookie and cracker aisle because you communicated something that caught their attention and engaged them. But if signage is in the front of the store, shoppers are more likely to have completed their trip, and it’s less likely to be effective.”

Once shoppers move into center aisles, it’s also crucial to be in the most effective aisle. VideoMining’s recommends that Mondelez place its brands within the first six aisles in the typical store, where consumers move counter-clockwise around the store. “The first one-third of the store is where they need to be,” Baboo said. Jain observed that shoppers “have more disposable income early in their shopping trip and are therefore more likely to purchase discretionary and impulsive categories such as cookies and crackers” then. Thus, optimal adjacencies for snacks are complementary categories such as coffee and tea, and bottled juice, where more purchases are planned.

Within the cookie and cracker aisle itself, they said, a number of merchandising principles make Mondelez’s efforts most effective. One of them is to group cookies and crackers separately, categorized by manufacturer. Strong vertical blocks of brands and products are more effective than horizontal ones because shoppers use their peripheral vision, which moves side to side.

Bookending the aisle with each category’s highest-penetration and highest–awareness “signpost” brands, Oreo and Ritz, serves to draw shoppers into the aisle. Those brands are what Mondelez is counting on for much of the success of its overall business model. So making sure that they’re effectively getting in front of shoppers in the supermarket is a very important last step in a crucial strategy.

Shoppers tend to be active in the cookies and crackers aisle, especially with its Nabisco and other brands, if Mondelez can get them there. Now, with the help of some sophisticated technology, the global snacks giant can do a better job of delivering consumers to the right place in the store and getting them to spend more freely once they're there.

Article by Dale Buss - http://www.cpgmatters.com/In-StoreMarketing0114.html

CPGmatters: Center Store Growth - a Journey, Not a Quick Fix

Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters. This article is based on The Tipping Point for Center Store, a report from AMG Strategic Advisors, the consulting unit of Acosta Sales & Marketing.

As traditional retailers attempt to reinvent their perimeter with a more dynamic shopping experience and capitalize on natural and health/wellness trends, they have eaten into center-of-store categories and diluted overall store profitability.

A range of efforts to revitalize center store traffic are being deployed: everyday low pricing; using center store to sell upscale non-food items (for example, Wegmans); and moving to an "all-store" brand format while limiting assortment (Trader Joe's). We have also seen a shift in consumer/shopper focus. For instance, "owning" the organic/natural consumer (Whole Foods) or incorporating "store-within-a-store" (Target).

Beyond the healthy eating trend, the growing influence of Millennials and the U.S. Hispanic market as well as the expansion in cross-channel grocery shopping all must be considered if the center store is to return to a valued growth area.

The following are some strategic challenges that must be considered as retailers work with manufacturers to revitalize the center store. The nature of these challenges make it clear that there is no "quick fix." It will take time, considerable effort, trial/testing and thought leadership. Here are the challenges:

Holistic Understanding of Evolving Shopper Behavior: Retailers need to understand context for their shoppers' behavior; that is, beyond the economic factors, such as generational differences, a broad competitive landscape that includes all channels, and shopper item selection and de-selection once in the store.

Shopper Insights Required: Loyalty card data can help retailers understand the linkage of center store and the perimeter. There is a need to understand the leakage to other channels, including e-commerce. Where and why is there leakage and where do shoppers continue to have "pain points" in their shopping.

Merchandising Innovation and Aisle Reinvention: Retailers need to consider holistic, shopper-centric shopping solutions that factor in the reduced time in the store, and the continued value of convenience; for example, sections for "stay healthy," school lunch sections, barbeque destinations, aligning complementary categories such as marinades in the meat section, etc. Operators also need to consider in-aisle display space that will bring shoppers into the aisle — perhaps meal solutions or a display of new items featured in a destination in the middle of the aisle.

Product Innovation: Manufacturers need to continue to delight shoppers with relevant innovation, taking into account the changing face and needs of the growing shopper base; for example, Millennials' adventurous food palates, Hispanic interest in family options and healthier options.

• Center Store Growth - a Journey, not a Quick Fix - CPGmatters
• The Tipping Point for Center Store - AMG Strategic Advisors

By Barbara Ford and Colin Stewart, SVPs at AMG Strategic Advisors

JULY 8, 2013